Dual Process Theories in Behavioral Economics and Neuroeconomics: a Critical Review

Abstract

Despite their popularity, dual process accounts of human reasoning and decisionmaking have come under intense scrutiny in recent years. Cognitive scientists and philosophers alike have come to question the theoretical foundations of the 'standard view' of dual process theory and have challenged the validity and relevance of evidence in support of it. Moreover, attempts to modify and refine dual process theory in light of these challenges have generated additional concerns about its applicability and refutability as a scientific theory. With these concerns in mind, this paper provides a critical review of dual process theory in economics, focusing on its role as a psychological framework for decision modeling in behavioral economics and neuroeconomics. I argue that the influx of criticisms against dual process theory challenge the descriptive accuracy of dualistic decision models in economics. In fact, the case can be made that the popularity of dual process theory in economics has less to do with the empirical success of dualistic decision models, and more to do with the convenience that the dual process narrative provides economists looking to explainaway decision anomalies. This leaves behavioral economists and neuroeconomists with something of a dilemma: either they stick to their purported ambitions to give a realistic description of human decision-making and give up the narrative, or they revise and restate their scientific ambitions.

Opportunities to improve ecosystem‐based fisheries management by recognizing and overcoming path dependency and cognitive bias

“…Proponents of the Dual Process Theory point to observational support as evidence that this characterization of cognitive processes concurs with experimental evidence and suggests that the different types of thinking complement each other, together promoting greater efficiency in decision‐making and action in even chaotic and uncertain circumstances (Tay et al., 2016). While this theory of cognition remains an active area of research and is not without its criticisms (Grayot, 2020), it has nonetheless provided a characterization, which has aided refinement and improvement of medical practice (Tay et al., 2016) and is beginning to be successfully applied in conservation (Cinner, 2019).…”

Decision Neuroscience and Neuroeconomics: Recent Progress and Ongoing Challenges

“…however it is well recognized that this characterization is an artificial heuristic as many processes rely on both (Etkin et al, 2016). The field of decision neuroscience may be at a tipping point in this regard, with some researchers arguing that dual system models still hold utility in its broad application if not its empirical descriptiveness (Grayot, 2020). Progress on other theoretical challenges such as understanding the "description-experience" gap has been less clear.…”

Higher Risk Taking and Impaired Probability Judgment in Behavioral Addiction

“…The dual process model has a long history that can be dated back to the pioneering proposals by Pavlov ( 2010 ) and Freud ( 1933 ) almost a hundred years ago. The model explains that the human psychological system is roughly divided into 2 processes; 1 is the intuitive process, which is characterized as fast and automatically generated; and the other is the reflective process, which is characterized as conscious and effortful, and yields inhibitory effects on the intuitive process ( Evans, 2008 ; Kahneman, 2011 ; De Neys and Pennycook, 2019 ; Grayot, 2020 ). These intuitive and reflective processes have been denoted by various nomenclatures in different studies, such as first versus second signals, experiential versus analytical, heuristic versus systematic, and system 1 versus system 2 ( Evans, 2008 ).…”